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America's longtime ally and the world's largest oil producer had somehow become, as a senior
Treasury Department official put it, "the epicenter" of terrorist financing. This didn't come entirely
as a surprise to intelligence specialists. But until the attacks of Sept. 11, 2001, U.S. officials did
painfully little to confront the Saudis not only on financing terror but on backing fundamentalists
and jihadists overseas. Over the past 25 years, the desert kingdom has been the single greatest
force in spreading Islamic fundamentalism, while its huge, unregulated charities funneled
hundreds of millions of dollars to jihad groups and al Qaeda cells around the world. Those
findings are the result of a five-month investigation by U.S. News. The magazine's inquiry is
based on a review of thousands of pages of court records, U.S. and foreign intelligence reports,
and other documents. In addition, the magazine spoke at length with more than three dozen
current and former counterterrorism officers, as well as government officials and outside experts
in Riyadh, the Saudi capital. Among the inquiry's principal findings:
• Starting in the late 1980s-after the dual shocks of the Iranian revolution and the Soviet war in
Afghanistan-Saudi Arabia's quasi-official charities became the primary source of funds for the
fast-growing jihad movement. In some 20 countries, the money was used to run paramilitary
training camps, purchase weapons, and recruit new members.
• The charities were part of an extraordinary $70 billion Saudi campaign to spread their
fundamentalist Wahhabi sect worldwide. The money helped lay the foundation for hundreds of
radical mosques, schools, and Islamic centers that have acted as support networks for the jihad
movement, officials say.
• U.S. intelligence officials knew about Saudi Arabia's role in funding terrorism by 1996, yet for
years Washington did almost nothing to stop it. Examining the Saudi role in terrorism, a senior
intelligence analyst says, was "virtually taboo." Even after the embassy bombings in Africa,
moves by counterterrorism officials to act against the Saudis were repeatedly rebuffed by senior
staff at the State Department and elsewhere who felt that other foreign policy interests
outweighed fighting terrorism.
Saudi largess encouraged U.S. officials to look the other way, some veteran intelligence officers
say. Billions of dollars in contracts, grants, and salaries have gone to a broad range of former